Fliperati

Based on my descriptions of the Realtors I met over the course of selling my first investment property, you probably won’t be surprised to learn that I hired someone from outside the circle of agents who had already visited the house.  I’m not sure if I discussed this before, but I briefly contemplated hiring the agent who represented me during the purchase of the property.  While I had a generally favorable impression of my Realtor after closing on the purchase of my flip, this viewpoint soured quite a bit when he gave me the run-around on a flat-fee listing.  Back when I was first listing the property, I told him I’d prefer to give him the $500 to put my house in the MLS rather than hand it over to a total stranger at another agency and he said that sounded reasonable but he would have to discuss it with his boss (the named broker at his agency).  After several days of back and forth this was the final verdict: they wouldn’t do a flat fee listing, but they were willing to do a hybrid FSBO/broker setup where I wouldn’t have to pay them a commission if I found my own buyer, otherwise it would be a typical 5% commission setup if the Realtor secured a buyer.  Of course there were also a ton of disclaimers about how any buyer who originally saw the property on the MLS would fall under the 5% commission category (although I have no idea how this could be proven/enforced) and other fine print. 

I understand if flat fee listings don’t fall under their existing business model, but I didn’t appreciate all the fake interest in the idea on their part while they tried to sell me on this other fee structure.  Plus, I still don’t understand how turning down free money fits into any sane business model.  I was trying to give them $500 of immediate income (99% profit since there are no costs to adding the listing beyond the time it takes to enter the data) and they turned it down in favor of attempting to earn a 5% commission on a sale that could take several months in a slumping market.  Plus, that 5% might not even cover their expenses (advertising, mileage, open houses, man-hours spent showing the property, etc) — especially if a series of price reductions were to erode commission value as the costs pile up while the house sits on the market.

So, how did I end up choosing a Realtor to represent me after I was unable to show the property myself any longer?  In short: the Internet!  My impression of most of the Realtors that came through my property was that they had access to very few buyer clients (they kept on telling me: “You have a beautiful property, but there just aren’t any buyers right now”), so I wanted to find someone who was still kicking ass and closing lots of deals.  If I were a buyer looking to find a Realtor to show me around, I would probably start on the web and search for a successful local agent, so I used that thinking to choose a seller’s agent. 

A single Realtor kept coming up at the top of numerous Google searches for local real estate agents and, beyond her strong search engine rankings, she also had a great website with mountains of useful info and a nice marketing platform for her listings.  She seemed to have tentacles in every corner of the web, from a presence on all the major real estate search pages to a dedicated personal section on her agency’s main website to an independent portal of her own at www.[realtorname].com.  I sent an e-mail to her on her personal site and received a reply right away.  Pretty soon we were chatting over the phone and I was grilling her about the local housing market, her sales approach, her current deal volume and a host of other questions.  I was impressed with all her answers and it was a pretty easy decision to hire her.

We set an appointment to meet at my flip a few days later to sign the papers.  That was a very fateful day and I’ll share more about in my next post.